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Economy and Democracy economic sociology_ the european electronic newsletter Vol ume 16, N umber 3 | July 20 15 16.3 Editor Asaf Darr Department of Sociology and Anthropology, University of Haifa Book Reviews Editor Mark Lutter, Max Planck Institute for the Study of Societies Editorial Board Patrik Aspers, Uppsala University Jens Beckert, Max Planck Institute for the Study of Societies, Cologne Johan Heilbron, Centre de Sociologie Européenne, Paris Richard Swedberg, Cornell University, Ithaca Table of Contents Note from the editor _2 Economy and Democracy Cracks in the Foundation. Retrenchment in Advanced Welfare States by Lea Elsässer, Inga Rademacher and Armin Schäfer _4 Energy Cooperatives as a Form of Workplace Democracy? – A Theoretical Assessment by Özgur Yildiz and Jörg Radtke_17 Democracy, Markets, and Rural Development: the Case of Small Goat-Milk Farmers in the Brazilian Northeast | by Oswaldo Gonçalves Junior and Ana Cristina Braga Martes_25 Interview: Chris Warhurst interviewed by Asaf Darr_34 New Frontiers in Economic Sociology _38 Economic Sociology and Opportunities for Organized Crime Research | by Annette Hübschle Book Reviews_ 42 http://econsoc.mpifg.de Note from the Editor 2 Note from the editor Economy and Democracy Economic sociology has been influenced by the 2009 fi- nancial meltdown and the ensuing legitimation crisis of The founding fathers of economic sociology showed great global capitalism. The crisis brought to center-stage a net- interest in the way governance structures and economic work composed of greedy and at time fraudulent invest- practice co-evolve. For Karl Marx, the modern state was a ment banks, brokers and politicians who together sustain means for the capitalist class to sustain, enhance and legit- global trade. This legitimation crisis engendered social pro- imate their control over the means of production (for a test and reconsideration of the true nature of redistribution discussion, see Mandel and Novack, 1974). Max Weber mechanisms in advanced economies. The 2009 financial presented a more intricate interconnectivity model. Using crisis exposed that it is not so much the poor and needy who the notion of “elective affinity” he described how religious benefit from state-level redistribution systems, but rather the belief systems and capitalism co-evolve and mutually sup- most affluent members of society. The crisis also rekindled port each other (Weber, 1958). His analysis of the unique theoretical interest in alternative forms of organizing eco- qualities of rational legal bureaucracies within modern nomic action, such as producer and service cooperatives and capitalism (Weber, 1969), as part of his larger project of banks owned by their many clients. Economic sociology the rationalization of modern life, is yet another example quickly reacted to the financial crisis and produced scholarly of his infatuation with the interrelations of governance work that identifies the pitfalls of global financial trading, structure and economy. Tocqueville’s year-long tour of the which led to the dramatic demise of bank and investment United States in 1831, which was intended to study the firms (for example, Fligstein/Goldstein, 2010). The aim of the American incarceration system, yielded an important book, July issue of the European Economic Sociology Newsletter is Democracy in America , which was published in two parts to highlight the renewed interest in the interrelations of (1835 and 1840). In this book he articulates how the ten- democracy and the economy. dency of Americans to establish grassroots organizations and their belief in equal opportunity supported, at least in An important intersection of democracy and the economy states opposed to slavery, entrepreneurship and a thriving is the redistribution system. Recent transitions in redistribu- capitalist economy. Americans, Tocqueville asserted, were tion mechanisms in Europe are the focus of the first article, dominated by their commercial drives and allowed busi- by Lea Elsässer, Inga Rademacher and Armin Schäfer . This ness norms and practice to shape their polity (for an in- article examines the degree to which welfare retrenchment depth analysis of Tocqueville’s political economy see has taken place in European countries, disaggregating Swedberg, 2009). welfare spending into four categories. Among the many interesting insights, of particular importance is the finding The relationship between democracy and capitalism has that the deepest cuts have taken place in those areas that remained a persistent theme in economic sociology (for most reduce inequality. The authors also reveal a shift in example, Polanyi, 1957). More recently, scholars have spending from the working-age population to pensions taken a critical look at neoliberal ideology, which asserts and services. that capitalism and “free” global markets enhance the democratization of underdeveloped economies. For exam- Why does democracy stop at the factory gate? This ques- ple, some studies point out that, in fact, there are many tion, posed by Langdon Winner (1977), highlights the fact types of democracy and varieties of capitalist system, each that we have learned to accept authoritative and non- composed of distinct sets of ties between governance democratic governance structures in the workplace, which structure and economic practice (Hall/Soskice, 2001). Criti- we strongly oppose in the political sphere. The constitution cal studies of the World Bank have exposed how affluent of clear boundaries between governance structures within Western economies try to enforce global neoliberalism – and outside work organizations is an attractive area of employing democracy as a rhetorical device – through a study, as it involves a re-examination of basic concepts system of loans to underdeveloped societies (for example, such as property rights and individual rights and their inner Kiely, 1998) tensions. While the vast majority of capitalist workplaces are far from being democratic, some work organizations economic sociology_the european electronic newsletter Volume 16, Number 3 (July 2015) Note from the Editor 3 implement democratic governance structures in their daily alternative forms of work organization. He is also asked operations. In these workplaces – for example, bakeries about his current interest in job quality, which might be- and taxi cooperatives – workers own their workplace, elect come a bridge between economic sociology and labour their managers and even constitute a justice regime with process analysis. an internal court with independent judges. The second article in this issue presents the growing interest in differ- The section ‘New Frontiers in Economic Sociology’ offers a ent forms of economic democracy. It deals with the appli- review of the literature on illegal markets and organized cation of an alternative organizational form, a cooperative, crime, and a presentation of research questions that can in the German energy sector. Özgür Yildiz and Jörg Radtke be addressed by economic sociologists. Annette Hübschle explain that cooperatives in this sector existed already in argues that illegal markets and illegal trade must be seen the late nineteenth century and have received government within a broad perspective, including the interrelations of as well as grassroots support in the early twenty-first cen- legal and illegal markets and the active participation of tury with the push towards renewable energy. The authors organized crime, as well as government agents and cus- suggest that energy cooperatives do not conform to the tomers who are willing to ignore the illegal nature of a strict and narrow definition of workplace democracy, which given area of trade. promotes workers’ ownership and control over decision- making in their employing organization. Rather, Yildiz and I wish our readership instructive and interesting reading. Radtke provide a much broader definition of workplace democracy, which includes the meso and macro levels. On Asaf Darr these two broader levels they are able to demonstrate the [email protected] democratic nature of energy cooperatives. References Grassroots organizations supported by local and federal agencies can become powerful change agents. The third Fligstein, Neil/Adam Goldstein, 2010: The Anatomy of the article in this issue concerns the constitution of a goat-milk Mortgage Securitization Crisis. In: Research in the Sociology of market in one of Brazil’s poorest areas. Oswaldo Gonçalves Organizations 30 : 29–71. Jr. and Ana Cristina Braga Martes describe in detail how Hall, Peter/David Soskice (eds), 2001: Varieties of Capitalism: federal government programs to eradicate poverty, local The Institutional Foundations of Comparative Advantage. Oxford: government technicians, small farmers and goat-milk en- Oxford University Press. thusiasts have all contributed to the revitalization of goat Kiely, Ray, 1998: Neo-liberalism Revised? A Critical Account of raising, traditionally considered an inferior agricultural World Bank Concepts of Good Governance and Market-Friendly area. Employing actor network theory as a theoretical Intervention. In: Capital and Class 22(1) : 63–88. basis, they are able to describe the different stages of net- Mandel, Ernest/George Novack, 1974: The Marxist Theory of work formation and the translation processes that take Alienation. New York: Pathfinder Press. place within the network. Polanyi, Karl, 1957: The Great Transformation. Boston: Beacon Press. Side by side with new economic sociology, which is influ- Swedberg,
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